While some investors had expected some easing, most had thought any additional action was months away as Governor Haruhiko Kuroda had voiced optimism over the Japanese economic outlook even after soft economic data.
Japan's monetary policies are moving in the opposite direction of the hawkish policy tone adopted earlier this week by the U.S. Federal Reserve, which drove market expectations that the Fed will increase U.S. interest rates sooner than previously forecast.
In New York trade, the dollar surged 3 percent to 112.47 yen, its highest level since Dec. 31, 2007. The dollar is on track for its biggest one-day move against the yen since April 2013.
The European Central Bank had remained more hesitant in the face of deteriorating economic data in the euro zone. And the 0.4 percent rise in consumer prices in October announced on Friday lowered expectations the ECB will ease policy at its meeting next week.
The euro fell to a 26-month low before paring losses to trade just above the $1.25 level, down on the day. Against the yen, the euro traded up above 140.
The dollar index, which measures the greenback against six major currencies, reached a four-year high of 87.133.
Gareth Berry, a currency analyst with UBS, said both the BoJ's monetary easing and the announcement by the Government
Pension Investment Fund are likely to propel dollar/yen higher, taking the pair closer to their three-month forecast of 115 yen.
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